Humboldt County Auditor-Controller Karen Paz Dominguez addresses reporters and the media from the courthouse steps. | Photos by Andrew Goff.

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In documents provided to local media and a subsequent press conference on the steps of the county courthouse, Humboldt County Auditor-Controller Karen Paz Dominguez emphatically disputed the information and findings in a scathing Civil Grand Jury report released Thursday.

Immediately after the hour-long press event, Paz Dominguez was approached by a process server who handed her a summons and a copy of a cross-complaint from the County of Humboldt.

The complaint accuses Paz Dominguez of misappropriating public funds, failing to comply with legal reporting requirements and violating a conflict-of-interest doctrine, among other charges. With this complaint, the county joins an ongoing lawsuit from the State of California against Paz Dominguez for failure to meet legally required deadlines for filing financial reports.

Positioned behind a standing desk and portable speaker attached to a running generator, Paz Dominguez said she is under a court-mandated admonishment that prevents her from discussing the details of her interviews with the Grand Jury. But she did say that she met with the independent investigative body only twice — first in August and again for an hour-long meeting last week, at which point the report had already been completed.

“What I will say is that any report is only as good as the information that is provided to the authors of the report,” Paz Dominguez said. 

Asked by the Outpost whether she believes the county has lost $2.3 million in funding due to late financial reporting, as the Grand Jury report says, Paz Dominguez said she does not believe it “because the county does have several different methodologies for seeking those reimbursements, even if they are unable to do it in what we’ll call round one.”

She added that she hasn’t seen any evidence that corroborates the allegation. “The auditor-controller’s office does sign off on claims for the county, and there have not been any claims submitted to our office that made any reference to loss of eligible funds,” she said.

At several points she expressed frustration about not being allowed to go into further detail. “I wish I could talk to you about the interview,” she said at one point, adding that she has reached out to legal experts to see if she is still bound by the court’s admonishment, which is an instruction given to all subjects of Civil Grand Jury reports.

Asked broadly about what might motivate the wide array of forces seemingly aligned against her — from the county Board of Supervisors, which passed a vote of “no confidence” in her, to nearly all county department heads, several outside vendors, the State Controller’s Office and now the Civil Grand Jury, all of which have laid responsibility for various fiascoes at her feet — Paz Dominguez said the motives will be different for each party. 

“Some of them are going to be motivated because they wholeheartedly believe that they have been provided accurate information and that they are doing the best possible for the community that we live in,” she said. Others have a “vendetta” that’s evidenced by the way they talk in public meetings and email communications “and the way that some of these supervisors communicate about me or the Auditor-Controller’s Office,” she said.

She also argued that conflicts between the elected auditor-controller and the rest of the county have existed for decades. 

Later in the press conference she painstakingly went through through each of the Grand Jury report’s 17 recommendations, explaining why she disagrees with nearly all of them.

She took questions from reporters for close to an hour. Much of that time, First District Supervisor Rex Bohn was seated atop the courthouse steps to Paz Dominguez’s left. She was joined throughout by Assistant Auditor-Controller Jim Hussey. 

First District Supervisor Rex Bohn (right) listens to the press conference.

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When she was done speaking, a man who’d been lingering on the periphery approached and walked up the steps. He handed Paz Dominguez a paperclipped stack of papers, said a few words that were inaudible from where the Outpost was standing and then quickly walked away.

Afterwards, we asked Paz Dominguez about the interaction. 

“It’s nothing we didn’t already know about,” she said, explaining that she’d been handed a cross-complaint. Last month, the Board of Supervisors voted in closed session to have an outside law firm file a cross-complaint to accompany the State of California‚Äôs lawsuit against her and the county.

The Outpost obtained a copy of the complaint, which contains six causes of action:

  1. Failure to Comply With Budget Reporting Requirements
  2. Failing to Comply With Financial Transactions Reporting Requirements
  3. Mandamus Relief (requesting the court issue a writ of mandate to compel Paz Dominguez to perform her assigned duties)
  4. Violation of Government Code Section 1090 (which says, in part, “Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members”)
  5. Violation of Common Law Conflict of Interest, and
  6. Misappropriation of Public Funds

Causes four through six pertain to a contract that Paz Dominguez entered into with Edge Caliber Coaching and Consulting, whose principal is Danny Kelley. The complaint alleges that Paz Dominguez failed to follow the county’s established contract approval process, after which Kelley voted for the Humboldt County Democratic Central Committee’s endorsement of her re-election bid and made a non-monetary contribution to her campaign valued at or about $1,144.

You can download a copy of the lawsuit via the link at the bottom of this post.

Meanwhile, the press packet Paz Dominguez emailed to reporters this afternoon contains dozens of documents — 17 megabytes worth — including one titled “A-C Initial Analysis of GJ Report.” That document is a reproduction of the report that has been extensively annotated with close to 100 comments responding to various segments of the report. 

By and large, the comments serve to dispute and dismiss the allegations in the report, sometimes referencing documents provided in the press packet and other times saying she is still working to gather evidence. You can download a copy of the annotated report via the link below.

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DOCUMENTS: